Understanding Annuities

Qualified vs. Non-Qualified Annuities

Which is right for you?

• Non-qualified annuities are purchased with after tax dollars outside of a retirement plan and offer the benefit of tax deferral.
• Qualified annuities are part of a retirement savings plan, such as a traditional IRA, a Roth IRA or 403(b). Because you purchase them with your pre-tax dollars, they follow the IRS rules for taxes and contributions.

Additional tax implications

When you use an annuity to fund a tax-deferred retirement plan, your annuity won't provide any additional tax-deferred benefits because your retirement plan already does so.

Annuities offer additional benefits that can help you reach your retirement goals. Talk to your tax professional to learn how the tax implications may affect you.

Consider your unique goals and current financial situation to decide whether a qualified or nonqualified annuity makes a better fit for your retirement plan.